Ssangyong Motor Co, part of the Mahindra Group, on Thursday said it has received 80 billion Korean won (about Rs 400 crore) from its majority shareholder Mahindra & Mahindra Group in lieu of the new shares offered to the Indian firm.
"...The full payment of 80 billion won for the new shares has been received from its majority shareholder Mahindra & Mahindra Group and that the paid-in capital increase was successfully completed," Ssangyong Motor Co (SMC) said in a statement.
On February 14, 2013, SMC had decided to make a third party allotment (Preferential Offer) to Mahindra to secure investment funds for new products.
"The 80 billion won paid-in capital for stock has been received, and the paid-in capital increase has been successfully completed," SMC CEO Lee Yoo-il said.
"As we have secured the funds, we will vigorously proceed with our investments for new product development such as small engines and small CUV and make utmost efforts for an early turnaround of the company and improve the corporate value," he added.
The preferential offer has resulted in an increase in the paid-up capital of SMC by 11.9 per cent and increase in M&M's stake in SMC to 72.85 per cent from 69.63 per cent.
SMC said all of the 14.54 million new shares will be locked up for one year, and the expected listing date in India is scheduled for June 7, 2013.
The Korean firm said that apart from the 80 billion won paid-in capital, Mahindra has also agreed to roll over the corporate bond worth 95.4 billion won that was scheduled to mature in 2014, by another year.
"This is an additional source of fund for Ssangyong Motor. With this, the company expects more tangible results from synergy in various areas of sales, sourcing, etc," Ssangyong said.
Mahindra had invested 522.5 billion won in 2011 to about 70 per cent stake in Ssangyong Motor Co.